On the picket lines outside the port of Felixstowe there is a feeling breaking point has been reached. Against a soundtrack of Bob Marley’s Get up, Stand Up pumping out over speakers, all the talk among the throng of dockers outside Britain’s biggest container terminal is of wages failing to keep pace with soaring living costs.
“People have had enough,” says Donna Crichton, one of the many represented by the Unite union in the eight-day strike, which ended without resolution last week. The 41-year-old, who lives at home with her parents, says buying or renting a home is a pipe dream when living costs are going through the roof.
“It’s just not cost effective. Your food bill is just going up; doubled, if not trebled. Your electric bill has gone up. We have three adults in our house who all work and we still struggle to cover everything we need,” says Crichton.
Her experience is one repeated up and down the country, as families brace for the typical energy bill to jump to £3,546 a year from October – almost triple the level a year ago. With inflation above 10% for the first time since the 1980s, and forecast to reach 18% early next year, charities warn sky-high bills will plunge many into destitution this winter.
Some forecasters expect the typical energy bill to top £7,000 next year, in a crisis industry experts say is unlikely to end soon. Even before taking this into account, official figures show the real value of average pay in Britain is falling at the fastest annual rate in 20 years, as wage rises are eroded by inflation.
It is against this backdrop the next prime minister will be expected to launch fresh measures to soften the blow. However, charities and political opponents say there is little sign Liz Truss or Rishi Sunak have grasped the severity of the situation.
“I don’t think they understand what’s coming,” says Sharon Graham, the general secretary of Unite, who visited the striking dockers at Felixstowe. “We can talk about whether the Tories ever get it, but I really think today they don’t get it – obviously they’re not understanding the hurt and the plight that people are in.”
Standing on the picket line in the late summer sunshine, Graham says the dispute over pay at the port reflects a far wider sense of national unrest, reminiscent of anger caused by Margaret Thatcher’s poll tax in the early 1990s.
In a matter of months, hundreds of thousands of people have gone on strike in disputes over pay, conditions or job cuts – including dockers, railway workers, refuse collectors, postal workers, and BT engineers and call centre staff. Many more from the public sector and elsewhere could join them within months, as Britain’s summer of discontent threatens to rumble on into the autumn, winter and beyond.
“I think the unifying factor across the country for me, yes it’s the cost of living crisis, that’s the term the media are using,” Graham says. “But in industrial terms, it’s pay cuts. If your pay isn’t keeping up with inflation then of course everything is more and more expensive.”
Daniel Maguire, a former bus driver in Ipswich who started working as a Felixstowe port operative just three weeks ago, is worried about his pay failing to keep pace with inflation, putting pressure on his family.
“It’s the price of food, the energy crisis, the cost of transport for my partner because she doesn’t drive. It’s all adding up,” he says. With three children at home, the idea of taking on overtime to keep up with rising costs is hard to stomach.
The dockers are pushing for Felixstowe’s operator, the Hong Kong-based multinational CK Hutchison, to improve on a 7% pay offer for this year. Ultimately controlled by the billionaire Li Ka-shing, one of the richest people in the world, the dockers say the company can afford a bigger wage rise after making £79m in profits last year. The company says many staff want to come to work but have been made to feel uncomfortable by the union.
“It’s a dangerous job,” says Maguire. “Inflation has hit everybody hard and it’s just a small chunk of the pie we’re asking for.”
Charities warn the stratospheric rise in energy bills this winter will devastate poorer families. Low-income households are expected to spend twice as much of their budgets on energy bills as high-income ones, according to the Resolution Foundation thinktank. For the poorest people living alone, an average bill will cost almost 120% of their annual income after housing costs, according to the Joseph Rowntree Foundation.
At first Truss dismissed the need for “handouts”, promising tax cuts instead to get the economy moving. Economists say the Tory frontrunner’s flagship pledges entirely miss the target. Reversing the national insurance increase will result in the richest fifth of households gaining twice as much in cash terms as the poorest 50% of families put together.
Economists say Sunak’s plans are more likely to help, although remain vague and insufficient for the national emergency. The former chancellor has promised to increase the £650 lump-sum payments for those on means-tested benefits that he announced while still in charge at No 11. His increase, however, is expected to fall short of calls for the payments to be doubled.
A government spokesperson said households were being supported this year with £37bn of help with rising living costs. The Treasury was making “necessary preparations” to give the next prime minister options to deliver support “as quickly as possible”, the spokesperson added. Felixstowe’s local MP, the work and pensions secretary, Thérèse Coffey, did not respond to a request for comment.
“All the talk of tax cuts is pretty much in cloud cuckoo land,” says Carys Roberts, the director of the Institute for Public Policy Research thinktank. Truss’s plan to cut taxes would only help richer households and her mooted cut in VAT could risk adding to inflation, she added.
“I’ve been shocked at how little the Conservative leadership debate has got near the scale of the problem. Solutions need to be much more about addressing energy prices. But then also they need to look at the adequacy of welfare payments and benefits,” said Roberts.
A few miles up the River Orwell, councillors in Ipswich have talked openly about whether rising energy bills could force the council to choose between shutting down the local swimming pool or the gas-fired crematorium this winter.
“Unfortunately, it’s actually quite an easy choice,” says Bryony Rudkin, the deputy leader of the Labour-run borough council. Allowing bodies to pile high is not something any politician could ever sanction, Rudkin says, even if people might want to use the leisure centre to avoid the rising costs of showering at home.
Those conversations have not yet moved beyond the hypothetical stage. But they demonstrate the mess Britain is in; as the consequences of austerity meet catastrophic energy bill rises – leaving Ipswich and towns like it unable to cope.
The council is looking at which of its public buildings could be used as warm banks, providing places of refuge for families struggling to keep the boiler running at home. Talks are being held with local churches and food banks, in a task complicated by the loss of £10m of central government funding since 2010.
“This is really biting,” says Rudkin. “Ipswich, like any town, is absolutely feeling the pinch.”
The government’s independent economic forecaster, the Office for Budget Responsibility, estimates that households will suffer the biggest annual fall in their living standards since the 1950s this year.
If households wanted to maintain typical energy usage, the economist Robert Wood at Bank of America expects they would need to spend an extra £280bn over the next two years. Clearly this is not going to happen, he says, as people will cut back on consumption. However, the need to stay warm and cook meals will force families to reduce their spending elsewhere to make ends meet.
Business leaders fear this knock-on impact will land a devastating blow for consumer-facing companies and the economy at large. The Bank of England has warned Britain faces a lengthy recession and rising unemployment as a result. At Felixstowe, the strike has led to supply chain disruption some experts say could affect Christmas deliveries and the wider economy, and comes as UK ports grapple with a Brexit downturn in trade thanks to added red tape and delays.
Cathy Frost, who owns the Loveone gift shop in the centre of Ipswich, has already seen a drop in trade and worries her business won’t survive the winter.
“Some of the conversations we’ve started to hear in here. Things like: ‘Oh we’re not going to do Christmas presents this year’. I’m a gift shop,” she says. Her business still has loans taken out during the Covid pandemic to stay afloat. “If I have to shut, then other businesses will too. We won’t have a high street. We won’t have a community.”
Jack Abbott, the Labour parliamentary candidate for Ipswich, says growing numbers of people like Frost are coming to him with their concerns. “People are pretty terrified actually,” he says.
“You’ve got a storm coming together. There needs to be a serious package of measures when the new prime minister comes in, and they have just weeks to deliver it to avoid economic and social oblivion. It really is that stark.”
